 |
 |
 May 31, 2006
FLAT FOOTED....Robert Nelson argues today that we shouldn't be too quick to get rid of the Alternative Minimum Tax:
As Nelson surely knows, there's wide agreement among economists that a broadly-based tax that minimizes exemptions and loopholes would be economically efficient. However, there is no agreement at all that having a flat rate is a good thing. It's wildly dishonest to say otherwise. —Kevin Drum 11:38 PM Permalink | Trackbacks | Comments (48)Comments
Also from the article: The Social Security trust fund is largely an accounting fiction Yeah, so is money. The stuff in my wallet says "Federal Reserve Note". The only reason it has value is because of an accounting fiction. Posted by: alex on May 31, 2006 at 11:49 PM | PERMALINK
Many people conflate "Flat" with "Single-rate". A mathematician, an accountant and an economist apply for the same job. The interviewer calls in the mathematician and asks "What do two plus two equal?" The mathematician replies "Four." The interviewer asks "Four, exactly?" The mathematician looks at the interviewer incredulously and says "Yes, four, exactly." Then the interviewer calls in the accountant and asks the same question "What do two plus two equal?" The accountant says "On average, four - give or take ten percent, but on average, four." Then the interviewer calls in the economist and poses the same question "What do two plus two equal?" The economist gets up, locks the door, closes the shade, sits down next to the interviewer and says "What do you want it to equal?" Posted by: Adam Smith on May 31, 2006 at 11:51 PM | PERMALINKI've been saying that for about 7 years, since I first heard about the dumbass tech bubble stock option paupers. But the equation which sets tax rates at a progressive level with no exeptions has one or two more terms than the equation with the flat rate. Where ever shall we find the slightly larger post card to put it on? Posted by: pantomimeHorse on May 31, 2006 at 11:53 PM | PERMALINKVJ: Many people conflate "Flat" with "Single-rate". Possibly because they're synonymous. Posted by: alex on May 31, 2006 at 11:54 PM | PERMALINK
"Possibly because they're synonymous." Sorry, but no. We can have a multi-rate, progressive "Flat Tax". It won't work any other way. Otherwise a single-rate would be so high it would bankrupt the Middle-class. How can something that applies only to a minority of taxpayers possibly be construed as a flat tax? Seriously, I just don't get that. I always thought the idea of the AMT, and the estate tax too, was to prevent wealthy people from skating without anteing up their fair share. Posted by: secularhuman on June 1, 2006 at 12:01 AM | PERMALINKGee, you mean that, contrary to standard right-wing talk show/talk radio b.s., to apply the same rate to all income would mean a tax increase on a supermajority of U.S. taxpayers? Incredible! What's could possibly be next on this amazing trip down insanity lane? The fact that "welfare" accounts for such a small fraction of the Federal and State budgets as to be almost non-existent? The fact that its not a "tax cut" if you simply borrow the money from China? Please, lay off the facts. I'm so used to B.S. that it will takes some time to adjust. Posted by: hank on June 1, 2006 at 12:05 AM | PERMALINKVJ, in what sense is a multirate, progressive tax "flat"? There's absolutely nothing flat involved. Using the word "flat" is just a way to confuse the issue and make the tax less progressive under the guise of "simplification". Posted by: KCinDC on June 1, 2006 at 12:15 AM | PERMALINKThe AMT works in many unexpected ways. As US ex-pats living in a foreign country, my wife and I are liable for both our host country's income tax (40+% of my salary goes for our host country's income taxes) and the AMT. (ATM trumps the exclusion of foreign earned income and deduction of income taxes paid to foreign governments.) I don't mind paying a high tax rate, but not to two countries at the same time. The US is essentially alone in taxing its ex-pats in this way. Posted by: Platypus on June 1, 2006 at 12:23 AM | PERMALINKAnyone see Broder's column in tomorrow's Post? A paean to Kevin's essential rightness as to the outcome of Bush's second term. http://www.washingtonpost.com/wp-dyn/content/ article/2006/05/31/AR2006053102040.html Posted by: bucky20816 on June 1, 2006 at 12:45 AM | PERMALINKA flat tax wont be flat. When all other consumer taxes and fees are considered, the oppression of the working class is only magnified by an idea that is obscene even considered in a vacuum. The US is well on the way to being the most regressive country on the planet. Posted by: Michael7843853 G-O in 08! on June 1, 2006 at 12:58 AM | PERMALINKso... There may be a way to have the simplicity and benefits of a flat tax with the social justice of a graduated tax. It would be to combine a flat-rate tax with a flat payment to each person, a fixed number of dollars per head. For low-income people, the payment would offset their tax, resulting in no net cost. For the very poor, the payment could replace welfare. But no one would find themselves in the discouraging rich-man's bind of being able to keep less and less of every dollar they earn. So the motivation to produce would remain constant. It would be perfectly "fair", because everyone is treated exactly alike; even the rich get the payment, tho it will be negligible compared to the tax they pay. And the poor could earn a dollar without losing much of it through offsetting reduction in welfare or other benefits. "From each according to his abilities [ie, earning power], to each according to his needs [ie, what is needed for basic human minimum living standards]". Wm. A. Wheaton Posted by: Bill Wheaton on June 1, 2006 at 1:32 AM | PERMALINKWow. Simply wow. I generally don't visit this website, and I'm really not aware of Kevin Drum. Except I have a vague sense that he has been bashed about in the so-called "right leaning" part of the blogosophere as a..., well, "dumb liberal." Well, I have to tell you, that, going to that article "blind" -- i.e., I don't know the liberal agenda or the "givens" that they may assume as common knowledge, my first thought was: What a pile of holes. Unless there are a whole lotta "unaddressed assumptions" I'm not aware of (as a non-frequent visitor to this site), might I just say: This article in no way makes a logical, well-laid-out argument for its position. "giving notice well in advance" is equated with "If it is left alone" "it will move us gradually but steadily toward a flat tax on income as inflation brings more people within its ambit." -- No 'Taxation without Representation' for you people, eh? Just: let the ignorant suffer sans a public debate on tax policy. "the existing system of tax subsidies is most generous to higher-income groups", yet: "The recently enacted tax bill raises the special AMT "standard exemption" to $62,550 for a couple filing jointly and to $42,500 for a single filer. ...But these changes are for one year, and absent new congressional action, the exemption will fall back to $45,000 for couples and $33,750 for individuals" Is this your definition of a "higher-income group"?!! "And unlike most other important policy changes, this is one in which Congress need do nothing," "Each year the president would submit his budget proposal, and Congress, in response, would enact final appropriations. A neutral expert commission..." I thought the constitution granted CONGRESS the right to appropriate funds? From whence does this 'neutral expert commission' arise? Quite frankly, the ignoring of: constitutional authority, the principle of elected representation, acknowledgement of conflicting monetary facts, etc., etc. evidenced in this article can only lead me to believe that 1) its proponents are truly -- and I mean, truly, in the all-encompassing sense of that world -- ignorant; or 2) they deflect the truth/facts in order to forward their particular agenda. What I have read on this post and the article it links makes me sincerely question the basic competence herein. If you represent the current iteration of the Democratic Party, it is no wonder you are perennial losers. I do not say this lightly (as I was raised as a Democrat) - but your lack of intellectual rigor [or intellectual honesty] is mind-boggling. Wow. Just wow. Posted by: cj on June 1, 2006 at 2:31 AM | PERMALINKUh, cj, Drum was *criticising* the article in question. Didn't you get that? Posted by: Matthew B. on June 1, 2006 at 2:48 AM | PERMALINKA flat tax, which I take to mean a single rate for all income levels, would do nothing to simplify paying your taxes. After deductions, credits, etc, under the current code, you get to the line that says "taxable income", go to the chart and there is the tax you owe. Under a single rate plan, you get to the same point, "taxable income" and multiply times "x" rate, and that is the tax you owe. Dear Mr. cj, Did you really spend all that time writing your post while making a false assumption about what KevinD wrote? In college there are students who fill up entire exam books with meandering nonsense that completely misses the point of an exam question, yet they come to the prof demanding an A grade. You must have been one of those students. Posted by: troglodyte on June 1, 2006 at 4:40 AM | PERMALINKDating Services lesbians lesbians It is a bit complicated. I may be confused. I am not a specialist in this area. But.....wide adoption of the AMT is regressive for the following reasons: 1. Dividend income is taxed at 15% under AMT. People with large amounts of dividend income tend to be wealthy and/or have high income. 2. Capital gain income is taxed at 15% under AMT. People with large amounts of capital gain income tend to be wealthy and/or have high income. The tax code, including AMT, has been moving to define income as wages (to include sources of investment income). Following this trend, only wage slaves will pay tax. Posted by: i dunno on June 1, 2006 at 7:26 AM | PERMALINKThe complexity of the tax code may have been less objectionable when the top bracket for taxpayers on the Federal side was 92% (pre Kennedy), or even in the early '80s, when the tax was set as a maximum of half of ones income. But, with the overall reductions in the percentage rates, at least the more "unusual" deductions should be stricken. The tax code approaches 65,000 pages. Is far too complex for any hundred people to understand, and needs a massive reduction program. Incredible amounts of the tax code have been written with only one or a few corporations or individuals in mind. This stuff needs to go first. Posted by: m on June 1, 2006 at 8:26 AM | PERMALINKIts amazing that Republicans are up in arms about the "death tax" but, seem to be paying so little attention to the AMT. Posted by: Stephen on June 1, 2006 at 9:13 AM | PERMALINKAs i_dunno (third base!) just pointed out, dividends and capital gains are effectively exempt from the AMT, since the AMT doesn't raise their rate from 15% no matter how much income one has. (As a result, it's the perfect GWB tax.) That's the obvious reform to the AMT - no exemption for those two kinds of income. Posted by: RT on June 1, 2006 at 9:39 AM | PERMALINKFlat tax = flat earth. JS Mill The earth is flat. TL Friedman So much for progress. Stephen: "Its amazing that Republicans are up in arms about the "death tax" but, seem to be paying so little attention to the AMT." Ah, but the AMT is a backdoor way to raise taxes on the middle class. Eliminating the estate tax is a way to shower riches on the upper .1%. The amazing thing about Republican tax policy over the past five years is that Republicans earning less than $100,000 have swallowed Bush's lies that they were benefitting from his "tax cuts" when really, they are just stealing money from their poor children to give to the richest 1% of Americans. On a different thread on May 26, we were dicussing what happened to wage growth in the US. has407 posted a number of stats that I interpreted as "The US economy has grown 2.5X since 1970. The US population has grown 1.5X since 1970. Yet, we are borrowing money to run government and subsidize our life styles." This raised the question of where HAS all that money gone??" Since then I have been working on the hypothesis that conservative policies have redistributed so much wealth to the richest people in America that everyone else in America is losing ground. For example, if you consider the wealth of the richest 25 Americans, setting aside a Billion for each, their wealth works out to ~$1250 in wealth for every other American. A flat tax is just another of those idiotic conservative ideas that resonate because it sounds simple. People think they will somehow outwit everyone else, but a flat tax would just further enrich the richest of the rich. That is why rich Americans think flat tax is a great idea. Bottom line, Nelson's "argument" is crap. Once again, a believer tries to twist reality to fit his ideology, and damn the consequences. Posted by: PTate in MN on June 1, 2006 at 10:04 AM | PERMALINKVery simply, to figure your AMT, you take your taxable income, add back in deductions from schedule A, subtract the AMT exemption ($58,000 MFJ for 2005) then multiply by 0.26 (0.28 over $175,000). Then you pay the higher of the AMT or what you computed on your 1040. This tends to hit upper middle class people in high tax, high housing cost areas, since the biggest deductions are for state income tax, real estate tax and mortgage interest. It doesn't affect very high income people because their deductions phase out and their marginal rates are higher than the AMT rates. Posted by: Jeff R. on June 1, 2006 at 10:27 AM | PERMALINKJust to make things more complicated for i_dunno, the dividend and capital gains rates are higher than 15% for a significant number of taxpayers. If they are in the "phaseout" range of the AMT exemption, meaning they have AMTI between something like $150k and $350k, then their effective tax rate goes to 21.5% (for those in the 26% bracket) or 22% (for those in the 28% bracket). Then it goes back down to 15% outside the range. Worst.Tax.Ever. Posted by: Matt on June 1, 2006 at 11:57 AM | PERMALINK"However, there is no agreement at all that having a flat rate is a good thing. It's wildly dishonest to say otherwise." Exactly! That's pure spin. Doesn't anybody at the papers urge the columnist to base their opinion on facts? Obviously not. So much for that idiotic idea that editors ensure the validity of the content and that the MSM is more reliable than blogs. My a**. THE RETHUGLICANS AND DEMOCROOKS START TALKING ABOUT A 15% FLAT TAX AND EVERY , BUTT HOLE WANTS TO JUMP IT. THIS IS WITHOUT EVEN ASKING , WHO WILL GET DEDUCTS , IS THERE A TAX LEVEL FOR 15% , AND DO WE STILL HAVE TO PAY SALES TAXES ? IN ADDITION WHAT ABOUT ALL THE MONTHLY BILLS WITH TAXES , FEES AND ANY THING LIKE A TAX TO PAY FOR THE IRAQ WAR ! ARE THERE ANY COMMENTS ABOUT THESE APPLES GRANNY ? Posted by: ANVIL HEAD on June 1, 2006 at 12:14 PM | PERMALINKA flat tax with a high deductible such as 50,000 to 60,000 might be more progressive than what we have. The money would be left in the hands of the people needing it the most either for savings or spending. Our economy might profit too. I'm not an economist, so maybe the economist and math people could discuss this. Posted by: JL on June 1, 2006 at 12:43 PM | PERMALINK'Bill Wheaton' posted: "There may be a way to have the simplicity and benefits of a flat tax with the social justice of a graduated tax. It would be to combine a flat-rate tax with a flat payment to each person, a fixed number of dollars per head. For low-income people, the payment would offset their tax, resulting in no net cost. For the very poor, the payment could replace welfare. But no one would find themselves in the discouraging rich-man's bind of being able to keep less and less of every dollar they earn. So the motivation to produce would remain constant." A very difficult accomplishment, as even with exemptions for food, medical care, drugs, and housing, the Middle-class would pay almost 3 times more of their income, proportionally, as the wealthy, and the poor would pay 5 times more of their income, proportionally, as the wealthy. Therefore, the kind of negative income tax that you are proffering would need to be atop all the exemptions I just mentioned at the very least. 'KCinDC' posted: "VJ, in what sense is a multirate, progressive tax 'flat'?" Putting aside RightWing propaganda, the flatness of a tax system has nothing whatsoever to do with the taxing rate. Granted, all of the so-called "Flat Tax" proposals promulgated by the RightWing are SINGLE-RATE, but that has nothing to do with being 'flat'. . "Using the word "flat" is just a way to confuse the issue and make the tax less progressive under the guise of 'simplification'." Quite. The originators of the misleadingly termed "Flat Tax", Professors Robert Hall and Alvin Rabushka, freely admitted in the 1983 edition of their book, that a "Flat Tax" would be "a tremendous boon to the economic elite from the start". In an appendix to the book, Hall and Rabushka estimated that their flat tax proposal would increase the tax bill for the lowest income families by 78 percent, and decrease it for the very richest families by 41 percent. Throwing money at the Rich & Corporate has never worked economically. I was simply explaining that a single-rate tax is not necessarily a flat tax and a flat tax doesn't necessarily need to be single-rate. Wouldn't adding a large deductible protect low income and lower middle class?? Posted by: JL on June 1, 2006 at 2:04 PM | PERMALINKRobert Nelson is obviously an idiot. If this is the caliber of teaching we have at university today, no woder our economy is fucked. Posted by: Juanita de Talmas on June 1, 2006 at 2:19 PM | PERMALINK"cj" must be a member of the Bush economic team. Posted by: Vicente Fox on June 1, 2006 at 2:23 PM | PERMALINKRobert Nelson's analysis that Kevin highlights seems to be incorrectly worded. My take is that Kevin and I agree that there is wide agreement among economists that a broadly-based tax that minimizes exemptions and loopholes would be economically efficient. I would only add that the AMT minimizes exemptions and loopholes and I would conclude based on economists opinions that it is thus economically efficient. It could however, be graduated and still be economically efficient(which is a valid point by Kevin). Posted by: Chad on June 1, 2006 at 6:17 PM | PERMALINKMax S. tears that column apart rather humorously. The Flat Tax is another right wing pantload. Here's a good flat tax critique[pdf] Posted by: Mike on June 1, 2006 at 11:42 PM | PERMALINKAll I can say is: From personal experience it's a no-brainer. I've paid the AMT once - because I lost my job in a closing, and received a severance package, after which I spent 19 months unemployed. That is, I incurred the AMT at PRECISELY the moment when I could least afford it. 手机铃声 和弦铃声下载 手机铃声免费下载 手机铃声下载 手机铃声下载 mp3铃声下载 下载手机铃声 三星手机铃声 手机铃声 免费铃声下载 铃声下载免费 搞笑铃声下载 搞笑免费铃声 铃声下载免费 搞笑下载铃声 下载铃声 三星铃声 免费铃声下载 MP3铃声下载 手机铃声下载 手机铃声下载 手机铃声 MP3铃声下载 手机铃声下载手机铃声 免费铃声下载 免费铃声下载 搞笑免费铃声 免费铃声下载 手机铃声 mp3铃声下载 免费铃声下载搞笑下载铃声 下载铃声 mp3手机铃声 三星铃声下载 免费手机铃声下载 手机铃声下载 手机铃声下载 免费铃声下载 搞笑手机铃声 手机铃声免费下载免费铃声下载 铃声下载免费 手机铃声下载 免费铃声下载 免费铃声下载 手机铃声下载 免费手机铃声下载 和弦特效铃声下载 文秘写作 竞聘演讲稿 个人工作总结 八荣八耻演讲稿 中国文秘网 治疗牛皮癣,阴虱特效药 免费歌曲铃声下载 免费手机铃声下载 免费铃声下载 mp3铃声下载 免费手机铃声下载 手机铃声下载 免费铃声下载 手机铃声下载 免费铃声下载 手机铃声下载 手机铃声下载 mp3手机铃声 免费手机铃声下载 免费铃声下载 免费铃声 手机铃声下载 手机铃声下载 免费铃声下载 搞笑铃声 免费手机铃声 免费铃声免费铃声下载 mp3手机铃声 mp3铃声下载 免费铃声 手机铃声免费下载 mp3铃声 免费手机铃声下载 免费手机铃声下载 手机铃声 手机铃声 免费铃声下载 手机mmf铃声下载mp3手机铃声 手机铃声 手机铃声免费下载 铃声下载 免费铃声 手机铃声下载 免费手机铃声免费铃声 免费手机铃声 mp3铃声 mp3铃声下载 免费铃声 Posted by: biu on June 3, 2006 at 5:12 AM | PERMALINKDiscount online pharmacy - no prescription! Cheap meridia - | |